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Don Mattrick

Zynga's new CEO Don Mattrick is conducting a top-to-bottom review of Zynga as he seeks to turn around the struggling social gaming company.

Mattrick, in his first earnings call as CEO after leaving his post as head of 's entertainment division, said he has been a fan of Zynga since he met Zynga founder Mark Pincus five years ago. "Joining Zynga is a once-in-a-lifetime opportunity to partner with a founder like Mark," Mattrick said. He made the remarks as Zynga announced its second quarter earnings, which beat expectations.

Mattrick is "getting under the hood" and reviewing Zynga's entire business, including its game pipeline, to determine where to make changes and how to improve the quality of games. He's placed his desk in the middle of the FarmVille team to get in the middle of the action. "I’m also going to use the next 90 days to assess and reset our product pipeline," he said. In other words, cut games that aren't producing or won't be big hits. Moving games to mobile continues to be a top priority--one that the company has previously expressed but hasn't happened quickly enough.

But while he does that, Mattrick expects two to four quarters of "volatility." In other words, tough quarterly numbers could continue for some time. "We anticipate two to four quarters of volatility as we work through resetting and developing our strategy for growing topline revenue and profit. I’ll be detailing more of this in coming calls and look forward to keeping you up to date on our progress. Getting a business back on track isn’t easy and isn’t quick."

On that point, Zynga expects bookings to decline again in the third quarter of 2013 due to the decay of older games and slow traction in new mobile games.

In other notes from the analyst call, there was bad news on Zynga Poker, one of the company's biggest revenue generators, which had bookings decline in the second quarter, said Zynga COO David Ko. He attributed some of that to illegitimate credit card activity. "We're not happy with our second largest franchise, Zynga Poker," Ko said, "Competitors are closing the gap. In response we're deploying top talent to get the franchise back on track."

As for why Zynga decided to abandon real money gaming in the U.S., Ko said essentially that Zynga decided it needed to focus on its core competency, social gaming. The decision makes sense, but also is basically an admission that all the talk about real money gaming in recent months has been a massive distraction. "The decision we made around real money gaming centered around focus. We looked at social gaming, free-to-play. It continues to grow and we're not executing against that. It really centered around focus."

The gaming move was a surprise announcement, after the company has been talking about aggressively moving into gambling in the U.S. for some time.

Zynga's top revenue generating games are Zynga Poker, Farmville and Farmville 2 with 20%, 16% and 15% of online game revenues, respectively. No other games had 10% of revenue in the quarter.

Mattrick was asked why Zynga doesn't slash costs further, since the company has 2,300 employees compared to upstart King, which has just 400 employees, but has more Facebook users than Zynga. Mattrick's response: Zynga still has work to do. He also admitted he plays King's hit game Candy Crush. "I'll fess up. I’m a Candy Crush player."